UPDATE 2-Corus hires BofA to find capital, buyer - source

* Bank seeking strategic options

* Put under special regulatory oversight in February

* Shares up 16 percent (Changes sourcing, updates share price)

BANGALORE, June 4 (Reuters) - Corus Bankshares Inc CORS.O has retained Bank of America to help it find capital or sell the lender hit hard by losses on condominium loans, a source familiar with the matter said on Thursday.

Corus said last month it had to develop a capital plan by May 19, under its agreement with the Federal Reserve Bank of Chicago. It said it was "undercapitalized" and hired an investment banking firm to seek strategic options, including a capital investment, sale, strategic merger or some form of restructuring.

Los Angeles billionaire Thomas Barrack's Colony Capital LLC and New York developer Related Cos, are among the firms that are interested in buying Corus assets, Bloomberg reported.

Investors may offer to buy the lender while it was still in business, or to purchase its assets out of receivership, it said.

Bank of America spokesman Jerry Dubrowski said in an e-mail to Reuters that the company has no comments on the report. Corus did not respond to repeated calls and an e-mail by Reuters.

Both Colony Capital and Related Cos declined to comment. The source is anonymous because the sale process is private.

Chicago-based Corus, with over $7 billion in assets, had been put under special oversight by its primary federal regulators in February, after posting losses for several quarters.

The company, once a top financier of condominiums, has suffered from a rapid decline in the value of collateral securing condominium construction loans, including many in hard-hit Arizona, southern California, southern Florida and Nevada.

Recently, the company's top management, including its chief executive and chief operating officer resigned.

In late May, U.S. bank regulators seized Florida lender BankUnited FSB, badly hurt by a collapsed Miami property market and sold it to some of the most powerful private equity firms in the world like Wilbur Ross's WL Ross & Co, Carlyle Group [CYL.UL], Blackstone Group (BX.N) and Centerbridge Partners.

Corus shares rose 6 cents to close at 43 cents on Nasdaq. They traded as high as $10.58 last September, Reuters data show. (Reporting by Anurag Kotoky and Esha Dey in Bangalore, and Paritosh Bansal in New York)